Published: September 3, 2010 10.59 Europe/London

SeaChange International is looking towards a tighter integration of its newly acquired software businesses as second quarter results disappointed investors. Revenues of $3.5 million marked an improvement on the $376,000 loss in Q2 2009, but the VOD and advertising specialist failed to match projects to revenues.

“There are a number of circumstances where we are observing the expense, but not seeing the revenue matched very well, Bill Styslinger, chairman and CEO, SeaChange, told an investor call. “I’m more focused on the second half and catching up, particularly in the fourth quarter where we have a lot of visibility.” Some $2.6 million in revenue is waiting to be recognised including $1 million on a major advertising project.

Styslinger said the primary shortfall was in the server area, where improvements in performance had driven down prices, making it was difficult to maintain revenues even though margins might be good. “My long term view of the server business is not good and it’s time for us to take steps to recognise that and get it to a point where it can be reliably profitable”.

Amid concerns that the contracts procedures of 2009 acquisition EventIS and before it Axiom were not equal to those of the new owner, SeaChange President Yvette Kanouff said the company had been focused on the technology and its integration into a single platform. “One of the biggest accomplishments this quarter has been the Starhub launch, which is truly a three-screen launch, the first operator to run on all three screens, PC, mobile and television all off the same VOD service”.